New Law takes effect December 31, 2013 & expanded for 2015
P.A. 497 of 2012 indicated that beginning December 31, 2013, a transfer of residential real property is not a transfer of ownership if the transferee is related to the transferor by blood or affinity to the first degree and has been expanded for 2015 to include adopted children, granparents and grandchildren, and the use of the property does not change following the transfer of ownership. See MCL 211.27a(7)(s). (1)
See also STC Bulletin 3 of 2013
The following information was taken from the Transfer of Ownership Guidelines (see link below) published by the State Tax Commission:
Is a transfer of property from a parent to a child a transfer of ownership?
Beginning with transfers occurring on and after December 31, 2014 only, no but only for property classified residential real and if the use of the real property does not change following the transfer of ownership.
Does this include relatives other than those related by blood?
Affinity to the first degree includes the following relationships: spouse, father or mother, father or mother of the spouse, son or daughter, including adopted children and son or daughter of the spouse.
When does this provision go into effect?
P.A. 497 of 2012 indicates that this provision is effective beginning December 31, 2013. Therefore, it is in effect only for transfers that occur on December 31, 2013 and after.
John and Jane Doe transfer their residential real property to their daughter Judy on December 1, 2013. Is this a transfer of ownership?
Yes, as long as no other exemption provisions apply.
John and Jane Doe transfer their residential real property to their daughter Judy on January 15, 2014. Is this a transfer of ownership?
No, as long as Judy maintains the same use of the property. MCL 211.7a(7)(s).
John and Jane Doe transfer their residential real property to their son Jack on March 1, 2014. Jack decides he wants to turn the house into a vacation rental home. Is this a transfer of ownership?
Yes, as long as no other exemption provisions apply because Jack has not maintained the use of the property.
The Property Transfer Affidavit (PTA) (Form 2766) is a result of the Proposal A reforms. The form is used to inform the local assessor of the transfer (sale, inheritance, etc.) of property. Before Proposal A, taxes were based on the Assessed Value of property. After Proposal A, a new value was added to your property entitled "Taxable Value" which is the value used to calculate your property tax bill. Proposal A “caps”, or limits , the rate of increase of your property’s “taxable value”. The taxable value cannot rise faster than the rate of inflation * (excepting value added through additions or deletions to the property) until the property is transferred. In the tax year following the transfer of the property, the taxable value will “uncap” and become equal to the current “assessed value”. Assessed value represents approximately 50% of market value. In order to ensure that this “uncapping” adjustment is made on all transferred property, the law now requires the transferee (buyer, inheritor, etc.) to file this form within 45 days of the transfer.
Title companies generally make the Property Transfer Affidavit available to buyers and sellers at the closing. However, it is in your best interest to be certain that the assessor receives these forms. You may call this office during regular business hours to check your property’s status.
*The Inflation Rate Multiplier determined by the State of Michigan for 2017 is 1.009
This is statewide and mandated by the State of Michigan.
The Assessor does not have any control over the Inflation Rate Multiplier.
BULLETIN 11 OF 2016: Inflation Rate Information
INFLATION RATE MULTIPLIERS AS
DETERMINED BY THE CPI*
Consumer Price Index History
2017 CAPPED TAXABLE VALUE FORMULA
2017 CAPPED VALUE = (2016 Taxable Value - LOSSES) X 1.009 + ADDITIONS
*The CPI is determined by the State of Michigan and is applied to all Taxable Values in all classes of property throughout the
State of Michigan.
The Assessor does not have any control over this figure.